From The NNA
Newspapers that have already faced much disruption in their public notice business for foreclosures may be about to face another shock. The mortgage foreclosure process will freeze for many types of loans from mid-January to mid-April while mortgage servicers begin to comply with a new set of federal consumer protection rules.
How quickly the transition in the remaining months of 2013 will develop remains to be seen.
The new federal Consumer Financial Protection Bureau, which recently required its first permanent director when Richard Cordray was finally approved by the Senate in early July after long partisan-driven delays, has flexed its new muscles over the mortgage markets. In July, it finalized a new set of consumer protection rules governing mortgage services that are intended to give borrowers more tools to avoid losing their homes.
The new rules are intended to stall foreclosures for 120 days after a lender determines a loan is in default. During that time, the servicer has new obligations to give borrowers an opportunity to avoid foreclosure, such as refinancing, agreeing to short sales and simply raising the money to cure the default. Only after the 120 days have tolled can the servicer begin the foreclosure process. The new rules also prevent services from providing forced-insurance without following certain personal notice processes and must comply with requests for data corrections within a specified time period.